Mubadala hunts for early-stage opportunities in Asia

Mubadala Investment Company, the state investment fund of Abu Dhabi in the United Arab Emirates, is looking for new partnerships in China and is seeking early-stage investments globally amid concerns over sky-rocketing valuations for mature companies.

The Abu Dhabi based fund started an incubator called Hub71 this week with an initial investment of $272 million, aiming to support tech startups in partnerships with Microsoft and Japan's SoftBank Vision Fund. Hub71 will also provide housing, office space and subsidy to attract more tech startups to the capital city of the oil-exporting nation.

Mubadala has been heavily devoted into tech sectors around the world, especially in Asia, as the company is trying to find the most disruptive technology and even bring them back to Middle East.

Khaldoon Khalifa Al Mubarak, managing director and group chief executive, said the technology sector remains one of several key areas of interest for the deep-pocketed sovereign wealth fund with more than 100,000 employees and $225 billion in assets.

“Projects for artificial intelligence, Internet of Things, biotech, technology for agriculture, and also healthcare is currently what we are looking into (for the early stage),” Al Mubarak said. “We are region-neutral, in terms of where to invest."

Mubadala’s started their own office in Hong Kong in order to get closer and to better understand the Asian market.

In 2015, Mubadala established the China-UAE Investment Cooperation Fund with $10 billion total commitments with each government contributing $5 billion. Mubadala also started a joint office with the fund in Hong Kong since 2018.

Al Mubarak said Mubadala also set up its own fund in Asia to invest directly into early-stage startups.

And it is ready to invest more capital into Asia indirectly through third-party funds such as SoftBank Vision Fund.

Al Mubarak said the investment giant has now gained more knowledge of the region through partnerships with local institutions such as SoftBank, Boyu Capital, and China Media Capital and will continue to co-invest with them, while seeking out new partnerships.

“Trusted managers and good track records, coming in when the time is right, that is how we choose our partners,” Al Mubarak said on the sidelines of the Bloomberg Invest Asia conference. “Through our trusted partners we learned a lot of other companies and then we decided to invest further, even directly. This is what we will also continue to do.”

There is also the potential to import some of the technology into the Middle East through these investments, he added.

Mubadala is tipped to be a co-bidder for part of Temasek’s stake in retailer Watson Group, together with Chinese internet giant Tencent.

When asked about the co-investment rumor with Tencent, Al Mubarak said Mubadala is in talks with many kinds of partnerships and declined to comment further.

Tencent's president Martin Lau said that the company is very open to international investors and hope to co-invest with others.